Policy Update: Legislative and PUC Happenings

May 31, 2017

Legislature: With a little more than a month to go in Oregon’s 2017 legislative session, it’s budget writing time in Oregon’s State Capitol. The legislature’s first job, above all others, is to pass a balanced state budget for the next two years. That’s a daunting challenge due to this year’s $1.4 billion difference in the cost of maintaining state services and anticipated state revenue during the same time period. With such a large budget deficit, any program that costs money is potentially on the chopping block—that includes Residential Energy Tax Credit (RETC) and even critical state programs like education and healthcare.

Renewing the RETC (HB 2681) is the solar community’s top priority this session. Since the prospects for winning on RETC are very much entwined with the question of how the legislature will address the budget deficit, solar advocates has been following the budget deficit discussion closely.

Oregon’s budget deficit is structural in nature, meaning that the state’s taxes and other revenue sources routinely fail to generate sufficient funding to cover the cost of state services. Without reform to Oregon’s tax policies, large deficits will continue to impact Oregon policy-making in future sessions and threaten state programs.

To address this structural deficit, legislative leaders in both chambers are developing plans that would significantly reform state tax policy. It remains unclear whether the legislature will be able to pass any such new revenue package, since bills to raise new taxes require a three-fifths majority vote (rather than the usual simple majority). Without a new revenue package, legislators will face an even larger budget deficit in the 2019 session and will have to resolve this year’s budget deficit through a combination of smaller increases in taxes, fees, and other sources of revenues and large spending cuts. Given all of that, the prospects of extending RETC without a new revenue package this year is much smaller than with one.

Solar advocates will have a chance to contact legislators very soon to support RETC. We’ll need to do this no matter how the legislature ultimately resolves the budget. We know Solar Oregon members are ready to help deliver the message of RETC’s importance. The time to help is coming quickly so stay tuned!

In other news, last week, the House Revenue committee held a successful hearing on another OSEIA priority, HB 2670, which would extend Oregon’s property tax exemption for solar and other net-metered alternative energy devices. The committee will vote this Wednesday, May 31, and the bill should move on to a full House vote soon after. There is no opposition to that bill and advocates will be making sure the bill works its way through the process.

Public Utility Commission: There has been a lot of activity around the community solar rule-making docket (AR 603) lately. OSEIA, Oregon solar trade association, and other allied interests have been meeting with staff and submitting comments on the proposed rules. OSEIA filed comments with the Coalition for Community Solar Access (CCSA), the national trade group of community solar developers and companies. You can read OSEIA/CCSA’s comments here. If you would like to read all of the comments submitted, you can go here. A second round of comments are due on Friday, June 2 and the PUC is scheduled to have a public meeting on June 27 in time to have the rules in place by July 1.

Even after the rules are adopted, there is still a lot of work to do. Parties will be immediately continuing the work to implement the rules. One of the main messages from all solar advocates has been “keep moving forward to be able to make offerings to customers as soon as possible.” We’ll continue to make sure that happens. As the rules are implemented, Solar Oregon will be involved in educating customers about how they might participate in a community solar project.